Partitions should be OK. Time Machine comes up asking for verification of the back up location. It gave me the option of selecting either of the two partitions I have on my external drive. Which, of course, I can't use since one is my Tiger back up and the other has all my music and video on it.

Can't answer the question about a 2nd internal drive since I have a MBP. It does not give me the option of choosing a different partition that exists on my internal drive however.

At this point am not convinced at all that Time Machine is a feature I have any use for on my personal machine. For my work machine, something like this would be great since that's where I'm creating documents all day.

I cannot be held responsible for the things that come out of my mouth.
In the Windows world, most everything folks don't understand is called a virus.